.To Live and Ride in Santa Cruz

Santa Cruz METRO envisions the future of transit and housing

On a sunny summer morning, Route 71 of the Santa Cruz Metropolitan Transit District (METRO) revs and hisses south on Soquel Dr. towards Watsonville. METRO operator Hai Nguyen is behind the wheel, sporting close-cropped hair and stylish sunglasses. He likes his job so much, he’ll even ride the buses in his free time. 

“I take the METRO on my days off. It drives my wife crazy,” he says.

Nguyen’s appreciation for the transit district is something that METRO wants to elicit in the rest of the community and the administration is looking beyond just improving its service.

Santa Cruz METRO is currently going through a transformation under the leadership of CEO Michael Tree. The transit agency is aiming not only to grow ridership to pre-pandemic levels, it is also addressing the pressing need for housing.

In the past few months, the METRO has received grants and awards from the state to improve its service, and just this week received over $20 million to upgrade its aging bus fleet. 

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Transit Woes

Public transit in California is in bad shape. The state is staring down a $31.5 billion budget deficit and in January Gov. Gavin Newsom announced a $6 billion cut to climate change initiatives that invested heavily in public transit. As a result, transit agencies throughout the state will not receive desperately needed additional grants as the expiration of federal COVID relief funds looms.

Last month, the California Transit Agency (CTA) presented a $5.15 billion budget proposal in the state senate to fund future transit operations. The plan aims to allocate money over the next five years from already-existing sources such as diesel fuel taxes and funds for transit development projects.

The cuts to transportation funding will affect the ability for transit agencies to expand service, infrastructure and fleet replacement. Typically, agencies cover their operation costs through a combination of federal, state and local funding from ballot measures approved by voters.

According to Sebastian Petty, a Transportation Policy Manager for the San Francisco Bay Area Planning and Urban Research Association (SPUR), California’s public transit agencies are in a $6 million deficit due to the pandemic. Larger transit districts such as Bay Area Rapid Transit (BART), which derives 60% of its operating revenue on fares, are particularly vulnerable due to decreased ridership.

In 1978, a measure was passed in Santa Cruz County which provides a half-cent sales tax in support of METRO. This makes the agency less reliant on fare revenue, which only accounts for 20% of its operation budget. However, ridership is down 25% from pre-COVID numbers, a fact that Michael Tree attributes to some in the job force pivoting to remote work. 

The numbers are rising, though. According to Tree, system wide ridership on METRO increased 20% over the last 12 months. He expects that it will increase to more than 4 million rides in 2023. Looking ahead, the agency has plans to double its ridership within five years.

Man With The Plan

In April, the CTA awarded Santa Cruz METRO $38.6 million to boost county efforts to provide a more eco-friendly bus service and build low-income housing on its properties. According to Michael Tree, the organization has three key goals: double ridership to $7 million a year by 2027, only purchase new, no-emission buses and develop 175 affordable housing units on METRO properties by the end of the decade. 

Before coming to METRO last year, Tree had been the head of similar-sized transit agencies in Boulder, Colorado; Missoula, Montana; and the East Bay city of Livermore. He 

was named Transit Manager of the Year by the California Transit Association in 2017 while Executive Director of the Livermore Amador Valley Transit Authority.

7 Million Mark

In order to reach the 7 million riders per year, METRO’s strategy is to create faster, more frequent and reliable service, says Tree. Having buses run more frequently is the top concern for riders, according to a recent METRO poll, and there are plans to have buses run every 15 minutes all day. Technology is also playing a role in enhancing services. As of last month, METRO riders could use Google Maps or the Transit App to track bus arrival time based on the traffic conditions through Automated Vehicle Locators onboard their buses. 

Other technological improvements include Wi-Fi on METRO buses and an automated passenger counting system that informs the public on the occupancy level of buses, said Tree. 

Eco-Friendly Buses

METRO’s goal to purchase no-emission buses got a shot in the arm this week as the agency announced a $20,381,950 in FY23 Federal Transit Administration (FTA) Bus and Low- and No-Emission Grant Award on July 3. METRO matched the grant with $3,690,050, to buy fuel cell electric buses to replace its older buses and develop a workforce training plan.

Twelve of their current diesel-fueled and compressed natural gas (CNG) buses will be replaced by four 40-foot and eight 60-foot hydrogen fuel cell-electric buses (FCEBs). By 2027, METRO hopes to make its Watsonville fleet 100% zero emission buses. 

Housing Help

The Pacific Station North affordable housing project at METRO’s Pacific Avenue transit hub is slated to break ground at the end of 2023. The 120 units will be designated for Very-Low Income households that make 30% or less of the area median income. METRO owns the property and the goal has always been to make it affordable for those of lesser means, said John Urgo, Planning and Development Director for METRO. 

“We don’t want to see downtown become unaffordable for the people that use our service,” he said. 

According to Urgo, around 60% of METRO’s ridership is considered Very Low Income.

The proposed affordable housing units at the Watsonville transit center are not yet approved and the project is an estimated 3-4 years out. Part of $38.6 million awarded in April to METRO by the California Transit Association has been earmarked for its development.

Watsonville Mayor Eduardo Montesino is a staunch supporter of METRO’s affordable housing initiative and believes the intersection of transit and housing projects is overdue in Santa Cruz County. He is also employed by METRO as an operator and knows the proposals well.

“From the state level, that’s what we’re geared towards,” said Montesino. “But our community hasn’t had that conversation of putting these two components together.”

Montesino believes that the community will benefit from transit planning that includes adjacent housing of all price ranges, including market rate dwellings.

“We have to break down barriers for access,” he says.

Potential future housing for METRO operators in South County is also being discussed, according to Montesino, as many of them live in the area or even further south.

Public meetings to discuss the Watsonville project will be held later this year.

Santa Cruz METRO is in a uniquely advantageous position to not only brace itself against the  fiscal hardship other transit agencies are facing, but to innovate and expand. But in order to have any of that, people need to hop on the bandwagon (or bus).


  1. I”m sorry but I totally disagree with the new spending for buses in Santa Cruz County. I have monitored the buses driving around Santa Cruz and the large passenger buses only have 1 to 3 people in that at any given time and day. the other day at the corner of 41st Ave, I saw 3 different buses pass me with NO ONE inside. This has to be a waste of resources. If you are going to get new buses, please get smaller buses that accommodate the current riders. One half of what we have would be sufficient. Someone in the agency should ride the buses at different times and count the riders. Is there somewhere where we can see the income from actual riders and the expenses to operating these buses. It gives me heart break to see such waste in our little town.

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